Bank of America Corp. Chief Executive Brian Moynihan said the U.S. housing market is “fairly stable” at a Wall Street Journal event in New York Wednesday.

Big banks have seen their mortgage banking income decline in recent quarters as refinancing activity fizzles. But Mr. Moynihan said that a decrease in refinancing activity is not indicative of the strength of the overall U.S. housing market. Instead, he said that home purchases, which have grown slightly since the beginning of the year, are what spurs broader economic growth.

The head of second-largest U.S. bank by assets also said that consumer spending has been solid, even in the face of a partial government shutdown.

Mr. Moynihan said he thinks the debate in Washington has become more sober since the government shutdown, and that a government default on its debt is off the table.

He added that he believed the Federal Reserve would keep rates low until the economy starts to show greater signs of growth.

Mr. Moynihan also spoke about how the bank has spent more than $40 billion to date putting its legal troubles behind it. He wouldn’t say whether he thinks the government is unfairly “shaking down” big banks with penalties for crisis-era behavior.

“What’s fair and unfair is a debate I have at 10 o’clock at night by myself,” he said.